Saturday, 23 February 2013

COT data of Feb 19th 2013 - British Pound [BP]

British Pounds - Total o/i was higher, at 187027, with spreads about unchanged, at 1353 (0.7% of the total).

Nett differences:
Commercials +46042 (from +33083).  Large Specs -23365 (from -16776).  Small Specs -22677 (from -16307). Commercials added considerably to their longs, but also added to shorts (although not in proportion to the higher total o/i). Small Specs reduced longs even further, and added to shorts.
Commercials (56.9% of total o/i) - 69.3% of Longs, 44.5% of Shorts, balance plus 24.8 
Large Specs (28.2% of total) - 21.9% of Longs, 34.5% of Shorts, balance minus 12.6
Small Specs (14.9% of total) - 8.8% of Longs, 21.0% of Shorts, balance minus 12.2

Commercials continued to add to longs as the market continued to decline, taking their nett balance to a comparatively high level. Large Specs continued to chase the market lower, reducing their share of  longs and adding very slightly to their share of shorts (although their actual number of short contracts went from 55437 to 64033). Small Specs joined in the rout, reducing longs and adding to shorts. This is beginning to put their share of the market (both as 'nett difference' and 'nett balance') in a rather precarious state.

Prices have continued to decline from last Tuesday's close, and it may be that further pressure will be seen based on Moody's reduction of Britain's credit standing from AAA to AA1. However, the COT statistics (having moved beyond the levels seen at last June's price lows) are now comparable to those seen in early March 2012, which also marked a low point in prices. We would follow the next major bullish chart signal (although that might not be immediate). 

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